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Ontario's eco fee confusion

Ontario shelved plans to extend eco fees a year ago, but consumers remain confused about existing fees, what they&rsquo;re for and where the money goes.

There is a lot of confusion among consumers as to which products are subject to eco fees and which are not. (Steve Russell / Toronto Star) | Order this photo

By Dana FlavelleBusiness Reporter

Sun., Feb. 26, 2012

A large bucket of white ceiling paint was on sale for just $29.97 at a Home Depot in Oakville last month.

But the paint ended up costing the customer $38.42 by the time the retailer added a $4.03 eco fee and then charged the sales tax on top. The customer wasn’t very happy.

It’s been more than a year since Ontario shelved plans to extend eco fees to a growing number of hazardous products amid controversy over the program.

But consumers remain confused about the existing fees, what they’re for, and how they’re spent.

Some retailers charge them at the cash register, others bury them in the price of the product. There’s more than one program in place and the rules surrounding them are about to change.

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Currently, retailers can charge eco fees on a variety of product categories, including TVs, computers and other consumer electronics, as well as tires and also nine specified household wastes, including paint.

The programs are managed by three separate organizations, for hazardous household wastes, for consumer electronics and for tires.

They started at different times. The program set up to manage paint and other hazardous household wastes was created in 2008. For tires and consumer electronics, it was 2009.

But they all operate in a similar fashion.

Each program is managed by a “stewardship” organization, a non-profit group representing the manufacturers, brand owners, or importers of the product.

The stewardship group runs public campaigns encouraging consumers to return the hazardous products to special municipal depots or designated stores, or bring them to annual special collection events.

The group then charges the manufacturers of the products a set fee to pay for their recycling or safe disposal.

Home Depot confirms it charges an eco fee at the point of sale and that the taxes are added on top. The chain has chosen to show the fees instead of hiding them “to give our customers transparency into our pricing,” said spokeswoman Alison Jones.

She added that the fees are taxable, so provincial taxes are applied to them.

Home Hardware also charges the fees at the point of sale “to ensure transparency,” said spokesman Rob Wallace. But Canadian Tire and Rona absorb the fees in the price of their products rather than showing it as a separate line item on consumers’ receipts.

Future Shop charges what its calls an EHF, or environmental handling fee, a separate line item at the cash register, the consumer electronics retailer confirmed.

When all producers are paying the same fee to have their items recycled, there’s little incentive to become more efficient or environmentally responsible, especially if the fee is simply passed to the consumer, they said.

“What we want everyone to understand is this is a new cost of doing business and consumers should understand if they see a fee, it’s not a fee that’s been created by government. It’s not a tax. It’s a fee that the brand owner, or the producer has decided you should pay,” said Jo-Anne St. Goddard, executive director of the Recycling Council of Ontario.

“Consumers need to be aware. It’s a buyer beware situation. They should be looking to how different competitors manage this cost,” St. Goddard said.

The program became a political football in July 2010, when the province added 13 household wastes, including shampoo, on the same day as the controversial new harmonized sales tax came into force.

Consumers revolted. The province withdrew the products from the program and is currently subsidizing municipalities’ costs of handling those materials.

The solution was regarded as a Band-Aid.

Indeed, Ontario’s efforts to divert any and all waste from landfill have missed their mark, provincial environmental commissioner Gord Miller said in his annual report last November.

The government has failed to meet its own goal of diverting 60 per cent of all waste from landfill by 2008. Instead, only 23 per cent of all waste in the province is being recycled, Miller said.

For hazardous wastes, Stewardship Ontario said the province set a goal in 2009 of diverting 68 per cent of hazardous household wastes by 2014-15. The agency said it can’t disclose its current performance until March 2.

It’s not just environmental advocates who see problems with the program.

Some recyclers and municipalities have complained the stewardship fees don’t accurately reflect the true cost of safely recycling or disposing of the materials.

The province’s largest paint recycler, Hotz Environmental, recently pulled out of the paint recycling program saying the latest fee structure would result in “substantial” financial losses.

The City of Ottawa has complained that the fees it receives under the program will result in a $429,000 shortfall this year in its hazardous household waste program,

In a bid to address some of these issues, Ontario Environment Minister Jim Bradley announced new regulations earlier this month that will change the way producers are charged.

The new approach, which eliminates the fee schedule in favour of a cost-recovery mechanism, will make it tougher for producers and retailers to pass the costs on to consumers in the form of eco fees.

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